Final Maturity Date

What it is:

A final maturity date is the date upon which all principal and interest must be repaid.

How it works (Example):

Any debt instrument is made of interest and principal components which an issuer is implicitly obligated to repay. Though interest and principal may be repaid in a number of ways according to the terms of the security, the final maturity date represents the legal deadline by which the entirety of principal and accrued interest on a debt instrument must be repaid to the holder.

To illustrate, suppose company XYZ issues a 10-year bond with a $1,000 par value and a 5% simple annual couponyield. If the bond's final maturity date is 31 December 2019, the $500 in interest (($1,000 * 0.05) * 10 = $500) plus the original $1,000 par principal must be paid in full no later than this date with no outstanding balance.

Why it Matters:

The repayment schedule differs from one interest-bearing instrument to another, but the final maturity date universally demands repayment of both principal and interest.

CONTENT LIBRARY

InvestingAnswers is the only financial reference guide you’ll ever need. Our in-depth tools give millions of people across the globe highly detailed and thoroughly explained answers to their most important financial questions.

We provide the most comprehensive and highest quality financial dictionary on the planet, plus thousands of articles, handy calculators, and answers to common financial questions -- all 100% free of charge.

Each month, more than 1 million visitors in 223 countries across the globe turn to InvestingAnswers.com as a trusted source of valuable information.